HealthQuad Announces First Close Of Its $73 Mn Healthtech Fund

Healthtech-focused venture capital fund HealthQuad has announced the first close of its second INR 550 Cr ($73 Mn) fund at INR 514 Cr ($68 Mn).

The VC firm has raised commitments from global investors like Ackermans & van Haaren (AvH), Teachers Insurance and Annuity Association of America (TIAA), SIDBI, Swedfund and pharma giant Merck & Co. Inc, among others. The platform is backed by impact investing and innovative finance-focused KOIS and the sponsors of Asia-focused healthcare private equity fund Quadria Capital.

HealthQuad’s cofounder and chief investment officer, Charles-Antoine Janssen, believes that the Covid-19 pandemic has given an impetus to the digital transformation of healthcare. The firm aims to create an ecosystem of such “category-defining” companies that improve accessibility and affordability and elevate the overall healthcare standards in India.

Amit Varma, cofounder at HealthQuad, noted that India needs to leverage technology and digital health if it wants to achieve its dream of ‘healthcare for all’. With Covid-19, this need to leverage technology to meet the healthcare need is far more reasonable. He also noted that focusing on promotion of wellness and preventive health is another important step.

“The healthcare industry needs to move beyond linear growth such as adding new hospitals and adding a fixed number of physicians every year, and instead look for ways to disrupt the existing operating models,” Varma said.

HealthQuad had closed its maiden INR 75 Cr ($11.6 Mn in 2017) fund in 2017 to invest in 8-10 companies with ticket sizes ranging between INR 1 Cr and INR 15 Cr. But the fund had the go-ahead from its limited partners for deal sizes of up to $10 Mn (INR 65 Cr in 2017). While announcing the maiden fundraise, Varma said, “We have access to INR 150-200 Cr from our limited partners apart from the fund’s INR 75 Cr. So the idea is to enable investments worth INR 400 Cr ($62.16 Mn) along with co-investors and partner funds.”

The Fund’s investment strategy focuses on investing in key healthcare subsectors namely healthcare delivery services, life sciences, devices and medical technology and health IT. Its portfolio includes Medikabazaar, Technology Healthcare Big Data Analytics, Strand Asian Institute of Nephrology & Urology (AINU), Neurosynaptic Communications, Regency Healthcare, and Hi Impact.

According to Datalabs by Inc42 report, India’s Healthtech Landscape In Post-Covid World, the Indian healthtech market will contribute $21 Bn by 2025, which is still only 3.3% of the total addressable healthcare market which is pegged to reach $638 Bn in 2025. Between January 2014 to March 2020, Indian healthtech startups secured a total funding of $2.3 Bn across 459 deals.